European equity are broadly flat today as a lack of new macro-economic news has left traders in wait and see mode. 

The positive session in New York last night slipped over to the Asian markets and that is why Europe is standing still this morning. Overall, things are quiet positive, as The Federal Reserve Chair, Janet Yellen, holds an upbeat outlook for the US economy but won’t be calling for interest rate hikes anytime soon.

The GBP/USD is higher on the day and the EUR/GBP is broadly unchanged today as the hawkish comments from Ian McCafferty yesterday still resonate with traders. The Bank of England member called for the quantitative easing programme to be wound down sooner rather than later. Should this be implemented, it would strengthen sterling without having to drive up borrowing costs. The weakness in the pound is causing headaches for British central bankers in the form of rising inflation. 

The EUR/USD is creeping higher as Janet Yellen’s comments over the past two days has softened the greenback. The Fed Chair would like to keep raising interest rates, but stated the process would be gradual. Traders feel that Ms Yellen isn’t going to rush any further tightening. Italian CPI in June remained at 1.2%, meeting expectations.  

We are anticipating the Dow Jones to open unchanged at 21,553, and we are calling the S&P 500 2 points lower at 2445.

At 1.30pm the US will announce the CPI report for June, and the consensus is for 1.7%, and that compares with the May reading of 1.9%. Robert Kaplan of the Federal Reserve is due to speak at 2.30pm, and he has previously called for inflation to be higher in order to justify higher interest rates.

Wells Fargo, JPMorgan and Citigroup all announce their second-quarter figures today.

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